One Government Contract Management Framework

1 Contract Management Framework Office of the Chief Advisor - Procurement Contract Management Framework Office of the Chief Advisor Procurement Page 2 of 28 Contract Management Framework July 2019 The State of queensland (Department of Housing and Public Works) 2019 This work is licensed under a Creative Commons Attribution Australia Licence. You are free to copy, communicate and adapt this work, as long as you attribute by citing Contract Management Framework , State of queensland (Department of Housing and Public Works) 2019.

2 Contact us The Office of the Chief Advisor Procurement is committed to continuous improvement. If you have any suggestions about how we can improve this guide, or if you have any questions, contact us at Disclaimer This document is intended as a guide only for the internal use and benefit of Government agencies. It may not be relied on by any other party. It should be read in conjunction with the queensland Procurement Policy, your agency s procurement policies and procedures, and any other relevant documents. The Department of Housing and Public Works disclaims all liability that may arise from the use of this document.

3 This guide should not be used as a substitute for obtaining appropriate probity and legal advice as may be required. In preparing this document, reasonable efforts have been made to use accurate and current information. It should be noted that information may have changed since the publication of this document. Where errors or inaccuracies are brought to the attention of the Department of Housing and Public Works, a reasonable effort will be made to correct them. Contract Management Framework Office of the Chief Advisor Procurement Page 3 of 28 Table of contents Introduction.

4 5 Purpose .. 5 Scope .. 6 Contract Management planning starts before a Contract is signed 6 Scope of the Contract Management Framework 6 Who does the Contract Management Framework apply to? 6 Roles and responsibilities .. 7 Phases and key steps to Contract Management .. 7 Phase 1 Contract set-up .. 9 Summary 9 Step Contract hand-over 10 Step Classify the Contract using value/risk assessment 11 Step Confirm Contract Management roles 12 Step Finalise the Contract Management plan 12 Step Set-up information Management 13 Step Conduct kick-off meeting 14 Phase 2 Contract Management .

5 15 Summary 15 Step Manage performance (establish KPIs) 16 Step Manage performance (reviewing performance measures) 16 Step Manage performance (monitoring) 17 Step Managing underperformance 19 Step Contract administration (records Management ) 20 Step Contract administration (financial administration) 20 Step Contract administration (risk Management ) 21 Step Manage complaints/disputes 21 Step Manage Contract extension, renewal or variation 22 Phase 3 Contract close-out .. 24 Summary 24 Step Final performance review 24 Step Lessons learned 25 Step Contract close-out (managing warranties/defects) 25 Contract Management Framework Office of the Chief Advisor Procurement Page 4 of 28 Step Contract close-out (managing transition) 26 Step Contract close-out (finalising Contract ) 26 Appendix A Contract Management planning.

6 27 Appendix B RACI .. 28 Contract Management Framework Office of the Chief Advisor Procurement Page 5 of 28 Introduction This Framework provides a guide to the Contract Management process as well as tools and templates to assist you in effectively managing contracts. The Contract Management Framework describes the required responsibilities associated with the three major phases involved in the Contract Management lifecycle. Phase 1 Contract set-up How to initiate and plan the Contract Management process. Phase 2 Contract Management How to administer and manage contracts.

7 Phase 3 Contract close-out How to close and transition contracts. Within each phase, there are a number of key activities to be performed. Depending on how the Contract is classified based on value and risk, the activities, focus and amount of effort required can vary. Figure 1 - Contract Management Framework The effective Management of contracts with suppliers is critical to queensland Government maximising benefits from procurement. These benefits are summarised below. Benefits of Contract Management Value for money Enable savings opportunities identified during the procurement or Contract Management process Enable further benefits through ongoing performance reviews, service improvements, supply chain improvements, innovation, etc Risk Management Reduce contractual risks through the robust Contract Management practices End-user outcomes Maximise outcomes to end-users/customers by managing supplier performance, maintaining quality.

8 Improving productivity and identifying opportunities for improvement and innovation Purpose The purpose of the Contract Management Framework is to provide a clear and standardised approach to managing and administering contracts for goods and services purchased from suppliers. The main objective of Contract Management is to ensure commitments and obligations from buyers and suppliers are effectively met, by delivering value for money outcomes and managing inherent risk. Contract Management Framework Office of the Chief Advisor Procurement Page 6 of 28 Scope Contract Management planning starts before a Contract is signed Activities performed prior to Contract award have strong impact on the Contract Management process.

9 Ensuring that key requirements are fulfilled before the Contract starts is fundamental for effective Contract Management . These requirements are as follows: Contract terms and conditions developed and agreed by all parties performance Management activities and reporting agreed Contract owner appointed Contract Management plan implemented. Although these activities are outside the scope of the Contract Management Framework they must be aligned with the Contract Management activities. For more information about how category Management planning and strategic sourcing impact Contract Management , refer to Appendix A.

10 Scope of the Contract Management Framework This document focuses on Contract Management related to post-award activities, once a Contract has been established through the strategic sourcing process (Figure 2). Figure 2 - Strategic sourcing and Contract Management integration The document does not cover: pre-award activities strategic sourcing, Contract negotiation, Contract development and Contract award (refer to strategic sourcing process) purchase to pay process to raise requisitions, purchase orders and process payments.